For weeks, Labour officials have been locked in meetings as they try to figure out how to present Westminster’s worst kept-secret: Keir Starmer’s slow U-turn away from his pledge to spend £28bn a year on the green economy.
Publicly, senior party figures insist that nothing has changed since last summer, when the shadow chancellor, Rachel Reeves, said the party would spend £28bn only if the party’s strict fiscal rules allowed.
But in private they admit that as it becomes clearer what kind of economy they would inherit should they come to power this year, the idea of actually hitting the target has become a pipe dream. Multiple frontbenchers and senior advisers confirmed to the Guardian this week that the target was now dead.
“I can’t explain why someone in communications got stuck on the £28bn figure,” said one shadow minister. “It’s kind of meaningless if it’s not actually attached to planned investments for a purpose.”
Speaking on Friday morning, the shadow chief secretary to the Treasury, Darren Jones, appeared to confirm as much, saying the target would “move around” depending on economic conditions and the projects that needed funding.
Officials insisted on Friday afternoon that Jones’s words did not signal an end to the £28bn “ambition”, as Starmer has termed it. But observers note that while Starmer continues to talk about the figure in public, none of the shadow Treasury team does.
Asked 10 times on Sky News this week whether she backed the target, Reeves refused to use the number at all, saying instead: “The importance of economic and fiscal stability … will always come first.”
Labour insiders insist there is no split between Reeves and Starmer on this key part in the party’s policy platform.
“I’ve worked in split teams, this is not a split team,” said one senior adviser. Those close to Reeves point out that while Starmer is often asked about the environmental aspects of the plan, the shadow chancellor is usually asked to defend the spending.
Nevertheless, some advisers, most notably Pat McFadden and Morgan McSweeney in Labour’s campaign team, want Starmer to say publicly that he is dropping the plan, while others argue that doing so would add to the impression he cannot be trusted.
Officials say they are not anticipating a “clarification moment”, when Starmer would come out and say what he thinks the party is likely to borrow to fund green investment, given the state of the economy. However, if the Labour leader does decide to make a public statement on it, he would probably do so after next month’s budget.
“We will see what the headroom looks like in March,” said one adviser. “There is not much we can say before that.”
The problem with Labour’s current position is that the party is in the worst of all worlds. As long as Starmer continues to talk about £28bn, the Conservatives will continue to claim that Labour intends to raise taxes to pay for it, despite Reeves’s insistence this will not happen.
But while the Labour leader defends what some of his most senior allies call a “meaningless” target, the party has allocated only about £10bn a year worth of projects on schemes including a publicly owned energy company and a home insulation plan. And with officials insisting these also remain subject to the party’s fiscal rules, some green activists worry they will soon be scrapped as well.
Steve Coulter, head of economy at the Green Alliance, said: “This is not a story about an arbitrary number. It’s a fundamental question about the kind of future we want to live in.
“Will Labour retrofit millions of homes, tackling fuel poverty and bringing down energy bills? Will they revitalise our automotive and steel industries, providing high-quality jobs and protecting our national security?”
Senior Labour figures say that honing the commitment to focus solely on what has already been announced would boost the party’s green credentials. “It was always intended to be allocated before the general election, so this isn’t such a major departure really,” said one. “It’s being firmed up not dropped.”
Shadow cabinet ministers are getting frustrated at the confused messaging. Louise Haigh, the shadow transport secretary, and Emily Thornberry, the shadow attorney general, warned at a shadow cabinet meeting last month that the constant speculation was damaging policymaking more generally.
Some say Sue Gray, Starmer’s chief of staff, was supposed to have resolved some of these disagreements in the last few weeks. Others say the blame lies with uncertainty on Starmer’s part.
Meanwhile the Conservatives, riven by their own divisions on issues including immigration and tax, are watching on delighted. One senior Downing Street official compared it to Theresa May’s decision to reverse her manifesto commitment to overhaul social care in 2017 while insisting “nothing has changed”.
Even if Starmer formally ditches the £28bn target next month, some believe it is too late to stop the Tory attacks on the policy.
“I don’t know why they’re even bothering,” said one adviser to the prime minister, Rishi Sunak. “We’re just going to go on about £28bn even more.”
